The continuing divide over Obamcare’s repeal

Robert King of the Washington Examiner reports that an Easter congressional recess has done nothing to narrow the current divide over repealing and replacing the federal Affordable Care Act.

A united Republican bill to repeal and replace Obamacare appears more and more out of reach after an Easter recess full of rowdy town halls, which have emboldened centrist Republicans to oppose an aggressive repeal of Obamacare being pushed by conservative Republicans and the White House.

The key sticking point for Republicans is which Obamacare regulations states would be able to ignore under the final bill. The conservative House Freedom Caucus wants to let states opt out of a health insurance price control called “community rating” and a rule mandating essential health benefits, because they say those provisions lead to higher costs.

But centrists are balking, particularly about the community rating, which forces insurers to charge people of the same age the same rate so that sicker people do not have to pay more.

The town halls being held during the Easter recess seem to be furthering the divide between the two factions, with the fight over pre-existing conditions being the main dispute. While people with pre-existing conditions could still get coverage, without community rating insurers could charge them exorbitant prices.

Conservatives say that high-risk pools can act as a safety net for those patients. However, centrists worry that the conservative plan would erode the Obamacare benefit, leaving them to face soaring costs.

Taxpayers funding union work

Bill McMorris of the Washington Free Beacon details another disturbing report about the use of taxpayer funds for union activity.

An analysis by a pro-free-market think tank estimates that at least 1,000 federal workers paid with taxpayer dollars exclusively worked for labor organizations rather than performing duties at their government jobs.

Taxpayers spent $162.5 million on federal employees performing union activities in 2014, according to the Office of Personnel Management’s most recent data. The Competitive Enterprise Institute used official budget documents and Freedom of Information Act requests to validate how many federal employees worked under such conditions.

“It is likely that thousands of federal employees spend 100 percent of their time performing union activity instead of the public service they were hired to do,” the CEI report published Tuesday says. …

… Federal officials have been allowed to perform union work while on the clock since Congress passed the Civil Service Reform Act of 1978. The provision was devised to help workers file workplace grievances and negotiate with their employers, but CEI labor expert Trey Kovacs said the exact nature of the work is unclear thanks to lax accountability measures.

“A general lack of transparency surrounding the practice makes it impossible to know what specific activities are performed on official time or what its costs are,” the think tank said. “Despite numerous investigations, federal agencies have done very little to safeguard public funds by properly tracking and reporting on the cost of official time and the number of hours used.”

A second Korean War

David French of National Review Online explains why a new Korean War would represent a far different conflict than those Americans have seen recently in the Middle East.

The generation that fought in World War II and Korea is dying off. We no longer have lawmakers, generals, or diplomats who know what it’s like to endure a sustained artillery barrage. We haven’t seen allied cities burn, or casualties mount into the tens and then hundreds of thousands in mere days. Not for 30 years has the world witnessed a large-scale battlefield gas attack, and not for generations have we seen the kind of immediate, city-busting attack that not even Syria’s Assad could carry out.

All of those things would be in play if the armistice that has held for nearly 65 years was broken and hostilities resumed on the Korean peninsula. The news media repeat stats about the number of North Korean artillery pieces or rocket launchers that could hit Seoul, or the number of North Korean missiles that could hit any target on the peninsula, and it sounds more like a game of Risk than real life. After all, we know that we have overwhelming military superiority. We know that if war comes, we’ll win. We might even think that our nation is somehow combat-hardened after 15 years in Afghanistan and 13 years in Iraq. …

… There may come a time when the terrible aspects of the North Korean regime become so pronounced that we choose to risk that fragile stability. It may even be possible to mitigate those aspects — perhaps by shooting down North Korean missiles or employing other targeted strikes — without actually inviting the cataclysm. But it’s vital that we conduct our public debate with eyes wide open, fully aware of the immense risks present on the peninsula.

Trump’s ‘Buy American’ order panned

Kevin Williamson at National Review Online wonders whether one of President Trump’s most recent executive orders shows signs of cynicism or ignorance.

Trump, who is surrounded by people who fancy themselves “nationalists” (in the cause of what nation, it is not entirely clear), is wading deep into an ancient puddle of stupidity most recently explored by Barack Obama (remember his “nationalist” moment, which lasted for about a month in 2011?) and Debbie Wasserman Schultz, the woman who (accidentally) did more than anyone other than Kellyanne Conway and Hillary Rodham Clinton to put Trump in the White House. To call it “economic nationalism” would be too grand: It is merely a very narrow form of special-interest politics consisting of backdoor handouts to favored corporate interests.

Trump has signed an executive order organized around two themes: “Buy American” and “Hire American.” In sum, the executive order is intended to provide incentives for American businessmen to . . . not act too much like the guy who built Trump Tower with illegal-immigrant labor and who relies on the H-2B visa program to keep Mar-a-Lago stocked with dishwashers and housekeepers. That guy, if we are to take Trump’s rhetoric seriously, is kind of a jerk, one who doesn’t care about the country at all.

The “Buy American” order is, in Trump style, pretty vague, with a lot that will need to be filled in later by people who know what the hell they’re talking about. (Fortunately, he does have a few of those around.) It makes minor administrative changes to existing “Buy American” federal procurement rules, which date back to the “Buy American Act” passed in 1933, a year not renowned for the excellence of its political and economic ideas. Bad call, Herbert Hoover.

The Buy American Act essentially requires that the federal government go to U.S.-based providers both for raw materials such as steel and concrete and for finished goods such as computers and automobiles. Because this is incredibly stupid and fundamentally unworkable, there are waivers: Washington loves a waiver — see the Affordable Care Act.

New Carolina Journal Online features

Rick Henderson reports for Carolina Journal Online on a delay in the vote for a bill that would life distribution restrictions for N.C. craft brewers.

Jon Guze’s Daily Journal explains why craft brewers might consider taking their case to court.

House passes bill to study environmental effects of large solar installations, possible rules for decommissioning

State Rep. Jimmy Dixon, R-Duplin, lamented on the House floor Wednesday afternoon that the Environmental Review Commission that he chairs has atrophied in recent years.

The commission once was a go-to body for lawmakers hoping to thoroughly study environmental matters and possibly move items in bill form to the General Assembly, Dixon said. But in recent years “for some reason or other we haven’t brought the concerns through this commission that we should.”

And with that, he urged his colleagues to vote yes on House Bill 319 to study whether there are potential environmental concerns with solar facilities when they reach the end of their life cycle, and if decommissioning requirements are needed when removing them from the land.

The bill was approved 71-44, and was sent to the Senate.

When passed in the House Environment Committee on April 6, H.B. 319 was opposed by some Republicans. Others, such as Rep. Pat McElraft, R-Carteret, said it is good public policy to study the issues to ensure there are no hazardous materials problems stemming from disposal of solar materials.

“The solar industry needs to be responsible for taking them out of farmers’ fields so that they don’t become orphan landfills that we are spending millions of dollars cleaning up,” McElraft said during committee debate.

After approving a few minor language changes in an amendment by Rep. John Bradford, R-Mecklenburg, and supported by Dixon, the House passed the bill with no debate on Wednesday. Nine Democrats voted in favor of the measure, and seven Republicans opposed it.

“There are currently no state level requirements for decommissioning solar projects,” Dixon said. “We may not need any.”

However, if it is determined there are environmental risks with aging solar installations, Dixon said, the state should be prepared with a plan for what form  regulations should take.

 

 

Harvard study: higher minimum wage causes more restaurants to close

Background: a recent protest for a $15/hr. minimum wage in North Carolina.

So,

NC 15 hr disemploymentIf you needed even more evidence of the immorality of the push to more than double the minimum wage;

If you needed another reminder of the shocking trickery used to get poor fast-food workers to walk off their jobs and demand a wage that they could not practically get;

If the rise of automation, especially in fast food, still isn’t enough to persuade you;

If decades upon decades of widespread agreement among economists also isn’t enough;

If nauseatingly worse aspects of the minimum wage also hasn’t been enough, either;

there’s now this: a new study out of Harvard University entitled “Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit.” Here’s the abstract:

We study the impact of the minimum wage on firm exit in the restaurant industry, exploiting recent changes in the minimum wage at the city level. The evidence suggests that higher minimum wages increase overall exit rates for restaurants. However, lower quality restaurants, which are already closer to the margin of exit, are disproportionately impacted by increases to the minimum wage. Our point estimates suggest that a one dollar increase in the minimum wage leads to a 14 percent increase in the likelihood of exit for a 3.5-star restaurant (which is the median rating), but has no discernible impact for a 5-star restaurant (on a 1 to 5 star scale).

Not only does a higher minimum wage cause more restaurants to close, but lower rated restaurants are more likely to be forced to close. The perverse effects of the minimum wage of harming the very ones it’s supposed to help even extends to employers of the very ones it’s supposed to help.

Because lower-rated restaurants would be the ones more likely to employ low-wage workers.

If “moral” activists tricking fast-food workers to walk off their jobs to sit in the streets and demand $15/hr., here’s what the actual wage would become for many of them going forward:

$0/hr.

State Budget Crisis Unlikely

The Insider recently reported on a Fiscal Research Division analysis showing the Senate’s “Billion Dollar Middle Class Tax Cut” would lead to $600 million shortfalls in three of the next five years. Fiscal staff started from the assumption that state government would do all the same things the same way, just for more people. With these assumptions, spending would increase 4.0 percent to 4.5 percent each year, not far above the combined rate of population growth and inflation.

Legislators have not shown a willingness to grow spending so quickly. The current biennium (July 1, 2015–June 30, 2017) has annual spending growth of 2.6 percent. If legislators kept this pace, there could be a $145 million (0.6 percent of revenue) shortfall in FY2018-19, which could be easily addressed with part of a potential $300 million cash balance from the previous year. Surpluses would grow to $800 million in FY2021-22, excluding year-to-year balance transfers.

The cause of this $1.4 billion swing in fiscal fitness is a small change in assumptions. In its focus on services, Fiscal Research followed the methodology to create the previous starting point for budget preparation, the continuation budget. In 2013, legislators decided the starting point each year should be the money already committed on a recurring basis, not the programs. This small, technical change to the budget starting point, focusing, as most families and businesses do, on dollars spent instead of services rendered, is another procedural improvement that has made state budgeting better for taxpayers.

This difference also provides an excellent example of why five-year projections can receive support from progressives and conservatives alike. Those projections should include base budget, continuation budget, the biennial rate of growth, and constant per-capita spending adjusted for inflation. The revenue side should also include a range of estimates, including a risk of recession. OSBM included something like this in the governor’s recommended 2015-2017 budget, though with a smaller variation in expenditures.

OSBM_Projection_2015

Source: OSBM, Governor’s Recommended Budget 2015 – 2017